PAN rule changes: New requirements for NRIs, foreign entities and their authorised reps in India. Details here

RECENT changes to income tax rules have tightened the requirements for obtaining a Permanent Account Number (PAN) for non-resident individuals and foreign entities that are operating in India. The revised framework puts greater emphasis on documentation and identification.

A key change under the Income Tax Act, 2025, is that individuals acting as authorised signatories for foreign companies will now have to provide additional personal details, including PAN and address information. From April 2026, they must use Form 96 (formerly 49AA) for the application.

This change is part of a major overhaul of PAN application procedures, where category-specific forms (from 93-96) replaced legacy forms like 49A and 49AA. The updated framework aims to streamline the process, along with strengthening compliance requirements, particularly for non-residents and foreign entities with financial linkages in India.

What changes for foreign entities under new rules?

The revised PAN application has stricter documentation requirements for foreign nationals and foreign entities. Under the new rules, foreign individuals are now mandatorily required to furnish their Tax Identification Number (TIN) or equivalent issued by their home country, according to Gaurav Makhijani, Managing Partner at MGA.

“In addition, foreign entities must not only provide their TIN but also appoint a Representative Assessee / Authorised Representative in India who has a valid Indian address. AR also need to submit proof of identity and proof of address,” he noted, citing details from Form-96 for PAN application.

This brings a major change to the earlier framework, in which foreign entities were not required to mandatorily appoint an authorised representative in India. Thereby, this adds an additional procedural layer wherein the foreign entity now needs to identify a suitable representative, Makhijani said. “This will require executing documentation such as a power of attorney and navigating internal governance processes.”

What does it mean for authorised signatories of foreign entities?

From the perspective of individuals acting as authorised representatives, the change could create uncertainty and, in some cases, lead to additional exposure, according to Makhijani.

“The intent is to ensure that Indian tax authorities have a reliable point of contact within the country; however, this also means that such representatives may receive notices or follow-ups in cases of non-compliance, non-filing, or outstanding tax dues where the foreign entity becomes non-responsive,” he pointed out.

He also stated that while the law does not explicitly impose tax liability on the authorised representative merely by virtue of such designation, the role carries a perceived administrative burden and potential risk, making individuals cautious in accepting such positions.

Any individual with a valid Indian address and supporting proof of identity and address can act as an authorised representative. This position is often taken by executives such as CEOs, CFOs, or directors of the entity.

What changes for a non-resident individual?

Similar changes have been introduced for non-resident Indians as well under the new rules. Indian citizens. who qualify as non-resident Indians (NRIs) and resident but not ordinarily residents (RNORs), are now required to mandatorily provide their passport number in the PAN application, according to the expert.

“NRI is not limited to individuals associated with foreign entities. It is a tax residential status. Residential status under Indian tax law is determined based on physical presence in India,” he said.

Similarly, an Indian citizen working abroad for a prolonged period may qualify as an NRI, while a foreign national working in India could become a tax resident depending on the duration of stay, he said. Therefore, the PAN requirements applicable to NRIs are based on tax residency status and apply irrespective of any linkage with foreign entities.